Effects of Over Borrowing

Many college students are not aware of the amount of student loan debt they have accumulated and how much they will have to repay each month when they leave school. Over borrowing can mean a student may be unable to afford a car payment or to live on their own after they graduate. Some students may also find they have to work multiple jobs to make ends meet when their student loans enter repayment. When borrowing student loans, students should be realistic about how much they will earn following graduation and the amount of debt they can comfortably repay.

Compare Loan Payments to Projected Earnings

Repayment Calculators

There are several different student loan repayment plans available: standard, graduated, extended, income-contingent (Direct Loan Program), income-sensitive (FFELP), and income-based repayment. The overall cost of the loan and how long it will take to repay depends on the repayment plan selected. Consolidation loans also have varying repayment plans. The U.S. Department of Education provides calculators to help borrowers estimate their monthly student loan payments under different repayment plans.

Tip: Student loans are real money that must be repaid, with interest. To avoid financial stress after graduation, students should only borrow as much as they need to meet basic educational costs.